"There are countless pundits and other tech gurus describing Google Wave as a disappointment, lately. Most of that seems to come from the fact that nobody seems to get what Wave is for. So they compare it to social media. Is Wave the next Twitter? Nope. Is it the next Facebook? Nope. Is it going to replace Instant Messengers? Possibly, in some circumstances, but not any time soon."Read more here.

The fact that it even "integrates" with those other services suggests that it was never intended to be a replacement -- but possibly an additional tool that users of those services could employ.

You can for example add robots to your wave to integrate with blogger or twitter.

Having played with Wave a bit, I do see it as sort of a cross between email/wiki/IM tool that people can use to discuss or generate content with.

Of course, it sort of just represents a protocol - so uses for it can probably range into all sorts of realtime/live/collaborative applications in the future. This is probably why google has focused on developers initially, so that new ideas can be tested and implemented before the rest of the world jumps on board.